Let's face it, financial clarity is your path to financial freedom. But, you don't know what you don't know.
Law school taught you how to think and act like a lawyer: critical thinking, doctrinal law, legal writing, oral advocacy, presentation skills, and risk management. How to financially and operationally manage your firm is left up to you to discover should you venture onto the path of opening your own firm.
A common quandary I discuss with attorneys is their hourly billable rate.
How did you decide on your rate? Is it the rate your last employer billed you out at? Or is it the average rate of the attorneys in your town? Slightly less than the lawyer across the street from you while you pray to grab new clients who call around for fee quotes?
PS - statistically speaking, rate shoppers will more likely than not be the biggest PITA clients you'll ever have, but that's another topic for another day.
Personally, I don't think there is an official "right" answer when it comes to setting your billable rate, but I'm not happy with any of these options. And, here's why: none of them take into account profitable compensation for you.
While most law firms financially function the same with IOLTA accounts, retainers, and so forth, I have yet to see two firms who earn, invest and spend the same as another firm.
So...
to put this succinctly, if your billable rate is not "right" for YOUR financial situation, your firm will NEVER be profitable.
So, I challenge you to do a checkup to make sure that you are not setting yourself up for failure with a billable rate that is way too low.
Need help figuring this out? We've got you covered.
Download our Billing Profitably Calculator now to calculate the minimum hourly rate you need to bill in order to PROPERLY and PROFITABLY pay yourself.